Leadership - What Really Matters: A Handbook on Systemic Leadership (Management for Professionals)

Salary, bonuses, decisions, communication and leadership styles – suddenly all
of these topics are at the center of interest, and are often criticized. More and more
people are wondering: what is good leadership worth? What part does leadership
play in the company’s profits? What impacts can leadership have? Does leadership
make a difference? In the U.S., consultants have developed a suitable calculation
method: similar to the measure of success “return on investment” (ROI) there is
now the measure of the “return on leadership” (ROL), which is intended to provide
information on the profitability of corporate leadership.
How important is leadership as a business success factor really? The consulting
firm Hewitt Associates divided 320 U.S. firms into two groups, those with single-
digit and those with double-digit growth rates. It is interesting that more than 70%
of the top 20 companies have in-depth policies for the selection, development and
salary of executives. Among the less successful companies only 38% have such
an approach. It is also interesting to see that all of the top 20 companies use the
performance evaluation as a natural tool for career planning.
In companies with less economic growth, only 64% use the evaluation. The
“return on leadership” (development) would seem to be demonstrable. Unfortunately,
it has not yet gotten around to many German companies that investing in leadership
requires more than just lip service. The head of human resources at L’Oreal, Oliver

financially: how are we to behave

towards partners in order to be financially

successful?

goalsfiguresrequirementsmeasures

internal business processes: in which

business processes do we have to be the

best in order to satisfy our partners and

customers?

goalsfiguresrequirementsmeasures

Learn and develop : how can we

enhance our potentials for change and

growth in order to realize our vision

goalsfiguresrequirementsmeasures

customer: How are we to behave towards

our customers to realize our vision

goalsfiguresrequirementsmeasures

vision and strategy

Fig. 4.4 The balanced scorecard (Source: Kaplan and Norton 1996)

234 4 More Than Just Talking or: The Instruments of Systemic Leadership